When Google unveiled its Google Glass wearable electronic device, it caught the imagination of many people with its futuristic looks and premise. Following the initial buzz created by Google Glass, word has now surfaced that Microsoft is currently testing prototypes of its own internet-connected eyewear.

The tip comes from people who “claim to be familiar” with the plans at Microsoft according to the Wall Street Journal. “Technology companies can’t afford to wait,” Canalys analyst Daniel Matte said. “But device vendors will face a number of tough challenges including strict power constraints which limit the number of sensors.”

The market for wearable smart electronics is expected to grow to $10 billion by 2016. Microsoft missed out on the big smartphone market shift that occurred when the original iPhone launched in 2007. It also missed the boat after Apple found success in the tablet market with the iPad and saw its first generation, first-party tablet hardware flop. Microsoft doesn’t want to get caught flat-footed again in the wearables market.

Internet connected eyewear is expected to remain a niche category for at least the next 3 to 5 years, but products like Google Glass are expected to do well in specialized markets such as security and healthcare.

One key factor for wearable electronics such as Google Glass and competing products is the price. Google Glass is expected to sell for around $1,500. Those prices obviously need to come down significantly moving forward to attract a large consumer market. Consumers will also have to get past the “creep factor” of connected eyewear.

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